OREANDA-NEWS. August 26, 2011. The Federal Arbitration Court of the Povolzhie District confirmed legitimacy of the determination issued by the Office of the Federal Antimonopoly Service in the Volgograd Region (Volgograd FAS Russia) on fining “Volzhskiiraigaz” Ltd. 1.5 million Rubles for exercising actions that are recognised as market dominance and are prohibited under the antimonopoly law of the Russian Federation, reported the press-centre of FAS Russia.

Earlier Volgograd FAS Russia established that “Volzhskiiraigaz” Ltd. has dominant position on the market of integrated works for technical maintenance of a gas-distribution network in Volzhsk, and Sredneakhtybinsky and Leninsky Districts of the Volgograd Region. Taking advantage of emergency switching-offs (caused by gas leaks), the company was unlawfully forcing the population to sign agrements for technical maintenance of in-house gas equipment by refusing to supply gas until the agreements were signed.

Volgograd OFAS found that the violation committed by “Volzhskiiraigaz” Ltd. was unacceptable and socially dangerous, as it had resulted in infringing consumer rights for uninterrupted gas supply. Upon the fact of recognising the violation, the Head of Volgograd FAS Russia issued a determination of 21st February 2011 to fine “Volzhskiiraigaz” Ltd. 1.5 million Rubles.

“Volzhskiiraigaz” Ltd. disagreed with the determination and filed a lawsuit to Volgograd Regional Arbitration Court, which reversed the determination on the grounds of expiry of the limitation period for holding the violator administratively liable. The 12th Arbitration Appeal Court upheld the judgment of Volgograd Regional Arbitration Court.

On 16th August 2011, however, the Cassation Court heard the appeal of Volgograd FAS Russia, and overturned the judicial acts as unlawful and dismissed the claim of “Volzhskiiraigaz” Ltd. on reversing the determination issued by the antimonopoly body that imposed the fine upon the company.

“The position of Federal Arbitration Court of the Povolzhie District on this case is important not only as confirmation of efficient work of Volgograd FAS Russia towards suppressing antimonopoly violations in the gas industry, but it also establishes a precedent for determining the periods of limitation for holding violators administratively liable for abusing market dominance that took place prior to introducing amendments to Part 1 Article 4.5 of the Code of the Russian Federation on Administrative Violations. It enables to fully apply the principles of justness, unavoidability and timeliness of administrative punishment”, explained the Head of Volgograd FAS Russia, Mr. Pavel Mironenko.

Reference:

According to Part 1 Article 4.5 of the Code of the Russian Federation on Administrative Violations that was in force when “Volzhskiiraigaz” Ltd. committed the violation, a determination to impose a fine for antimonopoly violation could not be issued upon expiry of one year after the date when the administrative violation was committed. However, Part 2 Article 4.5 of the Code on Administrative Violations specifies that if an administrative violation is ongoing, the periods given in Part 1 Article 4.5 are counted from the date when the administrative violation was found. Under Article 14.31 of the Code on Administrative Violations the date of finding an administrative violation should be the date when a Commission of an antimonopoly body issued a decision on a case on violating the antimonopoly law.